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Carolina Trust Bancshares, Inc. (CART) SEC Filing 10-Q Quarterly report for the period ending Saturday, June 30, 2018

Carolina Trust Bancshares, Inc.

CIK: 1676667 Ticker: CART

Exhibit 99.1
 
 
News Release
For Immediate Release
 
Contact:
Jerry L. Ocheltree
President and CEO
Carolina Trust BancShares, Inc.
(704) 735-1104

Carolina Trust BancShares, Inc. Reports 2nd Quarter 2018 Results

Ø
$0.08 Net Income Per Diluted Share for the second quarter of 2018 as compared to $0.04 Net Income Per Diluted Share in the second quarter of 2017

LINCOLNTON, N.C., July 26, 2018 (GLOBE NEWSWIRE) -
Carolina Trust BancShares, Inc. (the “Company”) (NASDAQ - CART) reported its financial results today for the most recently completed fiscal quarter.  In the second quarter that ended June 30, 2018 (“2Q18”), the Company’s net income was $510,000 or $0.08 per diluted share as compared to $196,000 or $0.04 per diluted share in the quarter ended June 30, 2017 (“2Q17”), an increase of $314,000 (160%) or $0.04 per diluted share.

On June 15, 2018 the Company announced that it had entered into an agreement to acquire Clover Community Bankshares, Inc (“Clover”) and its subsidiary bank, Clover Community Bank (“Clover Bank”).  The pending acquisition requires regulatory and shareholder approvals.  During 2Q18 the Company incurred $323,000 in merger expenses.  If merger expenses were excluded, net income for 2Q18 would have been $792,000 or $0.12 per diluted share which is a non-GAAP (Generally Accepted Accounting Principles) measurement.  Please refer to “Note Regarding Use of Non-GAAP Financial Measures” and the non-GAAP reconciliation tables below for additional information.

The table below summarizes the key components of net income for 2Q17 and 2Q18.

$ in thousands
 
For the 3 months ended
             
   
June 30, 2018
   
June 30, 2017
   
Increase
(Decrease)
   
% Change
 
Interest income
 
$
5,198
   
$
4,266
   
$
932
     
22
%
Interest expense
   
1,155
     
846
     
309
     
37
%
Net interest income
   
4,043
     
3,420
     
623
     
18
%
Provision for loan loss
   
88
     
64
     
24
     
38
%
Noninterest income
   
366
     
256
     
110
     
43
%
Noninterest expense
   
3,620
     
3,327
     
293
     
9
%
Pre-tax income
   
701
     
285
     
416
     
146
%
Income tax expense
   
191
     
89
     
102
     
115
%
Net income
 
$
510
   
$
196
   
$
314
     
160
%
                                 
Non-GAAP measurements:
                               
Net income
 
$
510
   
$
196
                 
+ Income tax
   
191
     
89
                 
+ Provision for loan loss
   
88
     
64
                 
= Pre-tax pre-provision income
 
$
789
   
$
349
   
$
440
     
126
%
                                 
Net income
 
$
510
   
$
196
                 
+ Merger related expenses, net of tax
   
282
     
-0-
                 
= Net income, adjusted to exclude merger expenses
 
$
792
   
$
196
   
$
596
     
304
%
                                 
Return on assets
   
0.44
%
   
0.20
%
   
0.24
%
       
Pre-tax pre-provision return on assets
   
0.69
%
   
0.36
%
   
0.33
%
       
Return on equity
   
4.69
%
   
2.64
%
   
2.05
%
       
Net interest margin
   
3.76
%
   
3.80
%
   
(0.04
%)
       
Efficiency ratio *
   
82
%
   
91
%
   
(9
%)
       
Average assets
 
$
460,556
   
$
385,888
   
$
74,668
     
19
%
Average loans
 
$
370,875
   
$
317,221
   
$
53,654
     
17
%
Average deposits
 
$
381,125
   
$
326,081
   
$
55,044
     
17
%

*Note:  Efficiency ratio: Noninterest expense / (Net interest income + Noninterest income)
 
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Comparing 2Q18 with 2Q17, the $416,000 (+146%) increase in pre-tax income was due mostly to increases in net interest income of $623,000 (+18%) and noninterest income of $110,000 (+43%) that were partially offset by an increase in noninterest expense of $293,000 (+9%).  Income taxes increased by $102,000 (+115%), a  smaller percentage increase than pre-tax income due to the decrease in the Company’s marginal federal tax rate from 34% to 21%, effective January 1, 2018.

Net interest income increased from $3,420,000 in 2Q17 to $4,043,000 in 2Q18, primarily due to loan growth.  Average loans increased by $53.7 million (17%) from 2Q17 to 2Q18.  Over 80% of the loan growth was contributed by the Mooresville, Hickory and Denver, NC offices.

The net interest margin decreased by 4 basis points from 3.80% in 2Q17 to 3.76% in 2Q18.  The margin decrease was attributed to the shift in asset mix, as the ratio of average loans to average earning assets decreased from 88% in 2Q17 to 86% in 2Q18.  Although both the loan yield and cost of funds increased by 0.16% or 16 basis points, the additional liquidity maintained in cash and securities limited the increase in earning asset yield to 10 basis points.  For 2Q18, the yields were 5.24% for loans, 4.84% for earning assets, and 1.12% for cost of funds (including all interest bearing liabilities and non-interest bearing deposits).  If the Company’s subordinated debt were excluded, the cost of funds would be 0.96%.  Comparatively for 2Q17, the yields were 5.08% for loans, 4.74% for earning assets, and 0.96% for cost of funds.

Several factors affected loan yields including fed funds rate increases of 25 basis points each in June 2017, December 2017, March 2018, and June 2018.

Noninterest income increased by $110,000 from $256,000 in 2Q17 to $366,000 in 2Q18.  The increase was mostly due to higher overdraft fees on deposits which were $47,000 (+50%) higher in 2Q18 than 2Q17 and to an unrealized gain in equity securities that was $50,000 in 2Q18 as compared to $0 in 2Q17.  The growing Hickory branch that relocated to a newly constructed building during 2Q17 accounted for most of the increase in overdraft fees.  Under GAAP, beginning in 2018, the changes in fair value of equity securities are required to be recorded in income.  Previously, the changes in values were recorded through accumulated other comprehensive income in the equity section of the balance sheet.
 
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Noninterest expense increased by $293,000, from $3,327,000 in 2Q17 to $3,620,000 in 2Q18.  The largest increases were in merger expenses relating to the proposed acquisition of Clover, up $323,000, foreclosed asset expense, up $79,000 (+36%), and salaries & benefits expense, up $60,000 (+3%).  These increases were partially offset by a decrease in data processing expense, down $81,000 (-30%).
 
The merger expenses were attributed mostly to investment banking fees and legal fees associated with the Company’s plan to acquire Clover.  The increase in foreclosed asset expenses was attributed primarily to a write-down of one foreclosed property in the Charlotte area based on a recent appraisal and to an increase in general maintenance costs of the foreclosed properties.  The salaries & benefits expense was higher due mostly to salaries and wages, up $58,000 (+4%) from annual merit increases and from one additional employee in 2Q18 as compared to 2Q17.  Also, accruals for various employee incentive plans were higher by $34,000 (+29%).  Data processing expenses were lower due to an additional $77,000 recognized in 2Q17 to convert to a new core bank processing system.  The conversion was completed in 2017, and thus no conversion expenses were recognized in 2Q18.

During the second quarter of 2018, assets grew by $24 million (+5%) and were funded by deposit growth of $20 million (+5%) and stockholders’ equity of $18 million (+39%).  The cash generated from deposit and equity growth was also used to repay $12 million of the Bank’s advances from the Federal Home Loan Bank of Atlanta and the Company’s $3 million line of credit.

In April 2018, the Company initiated and completed a follow-on public offering of 2,310,000 shares of common stock at $8.00 per share.  The offering closed on April 23, 2018.  On May 14, the underwriters exercised in part their option to purchase additional shares of the Company’s common stock, purchasing 186,000 additional shares, also at $8.00 per share.  After deducting the underwriting discount and offering expenses, the net proceeds from both transactions totaled $18,438,000.

The asset growth during the second quarter was mostly in interest-earning deposits with banks, up $18 million (+50%) and in loans, up $7 million (+2%).  Commercial real estate loans grew by $9 million (+5%), with most of that increase being in non-owner occupied commercial real estate loans and owner occupied commercial real estate that increased by $6 million (+7%) and $3 million (+3%), respectively.  Loans collateralized by residential mortgages, including first liens on one to four family properties and home equity lines, increased by smaller amounts.  Conversely, there were decreases in acquisition, development and construction loans, mostly one-to-four family construction loans, totaling $4.6 million (-13%).

The Company grew deposits in all categories during 2Q18 including noninterest-bearing demand deposits, up $11 million (+17%), and interest bearing demand (including checking and money market), up $6 million (+5%), while time deposits and savings accounts grew by 1% each.  Management implemented a deposit incentive plan for 2018 with semi-annual goals to increase all deposit categories in each branch.  Management also continues to emphasize the importance of our borrowers having a deposit relationship with the Bank in addition to loan relationships.  Noninterest bearing deposits grew in each branch during 2Q18.  The largest amounts were in the Main office in Lincolnton, up $3.5 million (+26%), Gastonia, up $2.5 million (+26%), and Mooresville, up $2.2 million (+54%).

With the exception of the increase in foreclosed asset expenses discussed previously, asset quality measurements ranged from stable to improving during the second quarter of 2018.  The ratio of non-performing assets to total assets was 0.65% on June 30, 2018 as compared to 0.75% on March 31, 2018, as there were decreases in both nonperforming loans and foreclosed properties and an increase in total assets.  The annualized ratio of net charge-offs to average assets was 0.03% for 2Q18 as compared to 0.08% in 1Q18.  The ratio of the allowance for loan and lease losses to total loans remained unchanged at 1.03% at June 30, 2018 as compared March 31, 2018.  Similarly, the ratio of general allowance for non-impaired loans to total non-impaired loans was unchanged at 0.97% as compared to March 31, 2018.  The specific reserves for impaired loans decreased by $5,000 during the second quarter of 2018.
 
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Regulatory capital ratios for the Company’s wholly owned subsidiary, Carolina Trust Bank increased following a $6.4 million investment in the Bank by the Company of proceeds from the follow-on public offering closed in April 2018.  The Bank’s total risk-based capital ratio at June 30, 2018 was 13.14%, an increase from 11.41% at March 31, 2018.

About Carolina Trust BancShares, Inc.
Carolina Trust BancShares, Inc. is a bank holding company and the parent company of Carolina Trust Bank.  Carolina Trust Bank is a full service, state-chartered bank headquartered in Lincolnton, N.C.  The bank operates in the Western Piedmont and Mountain Regions of North Carolina in nine full-service branch offices in Lincoln, Catawba, Gaston, Iredell and Rutherford Counties and a loan production office in Rowan County.

Additional Information About the Merger with Clover Community Bankshares, Inc. and Where to Find It. This release does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  In connection with the proposed merger with Clover, the Company will file with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 with respect to the offering of the Company’s common stock as the merger consideration under the Securities Act of 1933, as amended, which will include a joint proxy statement of the Company and Clover and a prospectus of the Company. A definitive joint proxy statement/prospectus will be sent to the shareholders of each company seeking the required shareholder approvals. Investors and security holders are urged to read the registration statement and joint proxy statement/prospectus and other relevant documents when they become available because they will contain important information about the merger.
 
You will be able to obtain free copies of these documents through the website maintained by the SEC at http://www.sec.gov. You will also be able to obtain free copies of these documents by directing a request by telephone or mail to Carolina Trust BancShares, Inc., 901 East Main Street, Lincolnton, North Carolina 28092, (704) 735-1104, or by accessing these documents at the Company’s website: www.carolinatrust.com; or by directing a request by telephone or mail to Clover Community Bankshares, Inc., 124 North Main Street, Clover, SC 29710, (803) 222-7660. The information on the Company’s website is not, and shall not be deemed to be, a part of or incorporated into any filings made with the SEC.

The Company, Clover, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of the Company and Clover in connection with the merger. Information about the directors and executive officers of the Company and their ownership of the Company’s common stock is set forth in the Company’s definitive proxy statement as previously filed with the SEC on March 29, 2018. Information about the directors and executive officers of Clover and their ownership of Clover common stock may be obtained by reading the joint proxy statement/prospectus regarding the merger when it becomes available. Additional information regarding the interests of these participants and other persons who may be deemed participants in the merger may be obtained by reading the joint proxy statement/prospectus regarding the merger when it becomes available.
 
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Caution Regarding Forward-Looking Statements: This news release contains forward-looking statements. Words such as “anticipates,” “ believes,” “estimates,” “expects,” “intends,” “should,” “will,” variations of such words and similar expressions are intended to identify forward-looking statements. These statements reflect management’s current beliefs as to the expected outcomes of future events and are not guarantees of future performance. These statements involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. Factors that could cause a difference include, among others: the impact of the Tax Cuts and Jobs Act, including any changes in the estimated revaluation of our tax assets and liabilities; changes in the national and local economies or market conditions; changes in interest rates, deposit flows, loan demand and asset quality, including real estate and other collateral values; changes in banking regulations and accounting principles, policies or guidelines; and the impact of competition from traditional or new sources. These and other factors that may emerge could cause decisions and actual results to differ materially from current expectations. The Company undertakes no obligation to revise, update, or clarify forward-looking statements to reflect events or conditions after the date of this release.

Note Regarding Use of Non-GAAP Financial Measures:  This news release presents certain non-GAAP financial measures.  The adjustments to reconcile from the applicable GAAP financial measures to the non-GAAP financial measures are included where applicable in financial results presented in accordance with GAAP.  The Company considers these adjustments to be relevant to ongoing operating results.  The Company believes that excluding the amounts associated with these adjustments to present the non-GAAP financial measures provides a meaningful base for the period-to-period comparisons, which will assist the regulators, investors, and analysts in analyzing the operating results or financial position of the Company.  The non-GAAP financial measures are used by management to assess the performance of the Company’s business, including for presentations of Company performance to investors.  The Company further believes that presenting the non-GAAP financial measures will permit investors and analysts to assess the performance of the Company on the same basis as that applied by management.  Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied, and are not audited.  Although non-GAAP financial measures are frequently used by shareholders to evaluate a company, they have limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of results reported under GAAP.  Reconciliations of non-GAAP financial measures to the most directly comparable GAAP measures are included with this release.
 
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Dollars in thousands, except share and per share data

Carolina Trust BancShares, Inc.
Selected Financial Highlights
 
 
Unaudited
  Unaudited   (a)   Unaudited  
Unaudited
 
 
6/30/18
 
3/31/18
 
12/31/17
 
9/30/17
 
6/30/17
 
Balance Sheet Data:
                   
Total Assets
 
$
470,854
   
$
446,610
   
$
406,618
   
$
400,297
   
$
390,168
 
Total Loans
   
374,026
     
367,039
     
348,679
     
340,038
     
324,349
 
Reserve for Loan Loss
   
3,844
     
3,780
     
3,599
     
3,423
     
3,213
 
Total Deposits
   
393,279
     
372,902
     
340,653
     
337,589
     
330,893
 
Total Shareholders’ Equity
   
48,201
     
29,379
     
29,119
     
29,765
     
29,573
 

 
(a)
Note:  Derived from audited financial statements
 
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Comparative Income Statements
For the Three Months Ended

   
Unaudited
6/30/18
   
Unaudited
6/30/17
   
Variance
$
   
Variance
%
 
Income and Per Share Data:
                       
Interest Income
 
$
5,198
   
$
4,266
   
$
932
     
22
%
Interest Expense
   
1,155
     
846
     
309
     
37
%
Net Interest Income
   
4,043
     
3,420
     
623
     
18
%
Provision for Loan Loss
   
88
     
64
     
24
     
38
%
Net Interest Income After Provision
   
3,955
     
3,356
     
599
     
18
%
Non-interest Income
   
366
     
256
     
110
     
43
%
Non-interest Expense
   
3,620
     
3,327
     
293
     
9
%
Income Before Taxes
   
701
     
285
     
416
     
146
%
Income Tax Expense
   
191
     
89
     
102
     
115
%
Net Income Available to Common Shareholders
 
$
510
   
$
196
   
$
314
     
160
%
                                 
Net Income Per Common Share:
                               
Basic
 
$
0.08
   
$
0.04
                 
Diluted
 
$
0.08
   
$
0.04
                 
Average Common Shares Outstanding:
                               
Basic
   
6,583,719
     
4,654,880
                 
Diluted
   
6,671,626
     
4,722,607
                 
Non-GAAP Measure
Adjusted Net Income to Exclude Merger Expenses:
                               
Income Before Taxes
 
$
701
   
$
285
   
$
416
     
146
%
Add:  Merger Expenses
   
323
     
-0-
     
323
   
NM
 
Adjusted Income Before Taxes
   
1,024
     
285
     
739
     
259
%
Income Tax Expense
   
191
     
89
     
102
     
115
%
Less:  Income Tax Benefit from Merger Expenses
   
41
     
-0-
     
-0-
   
NM
 
Adjusted Net Income Available to Common Shareholders
 
$
792
   
$
196
   
$
596
     
304
%
                                 
Net Income Per Common Share:
                               
Basic
 
$
0.12
   
$
0.04
                 
Diluted
 
$
0.12
   
$
0.04
                 
Average Common Shares Outstanding:
                               
Basic
   
6,583,719
     
4,654,880
                 
Diluted
   
6,671,626
     
4,722,607
                 
 
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Comparative Income Statements
For the Six Months Ended

   
Unaudited
6/30/18
   
Unaudited
6/30/17
   
Variance
$
   
Variance
%
 
Income and Per Share Data:
                       
Interest Income
 
$
10,025
   
$
8,343
   
$
1,682
     
20
%
Interest Expense
   
2,215
     
1,669
     
546
     
33
%
Net Interest Income
   
7,810
     
6,674
     
1,136
     
17
%
Provision for Loan Loss
   
340
     
215
     
125
     
58
%
Net Interest Income After Provision
   
7,470
     
6,459
     
1,011
     
16
%
Non-interest Income
   
696
     
450
     
246
     
55
%
Non-interest Expense
   
6,716
     
6,304
     
412
     
7
%
Income Before Taxes
   
1,450
     
605
     
845
     
140
%
Income Tax Expense
   
359
     
198
     
161
     
81
%
Net Income Available to Common Shareholders
 
$
1,091
   
$
407
   
$
684
     
168
%
                                 
Net Income Per Common Share:
                               
Basic
 
$
0.19
   
$
0.09
                 
Diluted
 
$
0.19
   
$
0.09
                 
Average Common Shares Outstanding:
                               
Basic
   
5,667,619
     
4,654,635
                 
Diluted
   
5,763,824
     
4,728,495
                 
Non-GAAP Measure
Adjusted to Exclude Merger Expenses:
                               
Income Before Taxes
 
$
1,450
   
$
605
   
$
845
     
140
%
Add:  Merger Expenses
   
323
     
-0-
     
323
   
NM
 
Adjusted Income Before Taxes
   
1,773
     
605
     
1,168
     
193
%
Income Tax Expense
   
359
     
198
     
161
     
81
%
Less:  Income Tax Benefit from Merger Expenses
   
41
     
-0-
     
41
   
NM
 
Net Income Available to Common Shareholders
 
$
1,373
   
$
407
   
$
966
     
237
%
                                 
Net Income Per Common Share:
                               
Basic
 
$
0.24
   
$
0.09
                 
Diluted
 
$
0.24
   
$
0.09
                 
Average Common Shares Outstanding:
                               
Basic
   
5,667,619
     
4,654,880
                 
Diluted
   
5,763,827
     
4,728,495
                 
 
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Carolina Trust BancShares, Inc.
Quarterly Income Statement
Dollars in thousands, except share and per share data

   
For the three months ended:
 
Income and Per Share Data:
 
Unaudited
6/30/18
   
Unaudited
3/31/18
   
Unaudited
12/31/17
   
Unaudited
9/30/17
   
Unaudited
6/30/17
 
Interest Income
 
$
5,198
   
$
4,827
   
$
4,672
   
$
4,434
   
$
4,266
 
Interest Expense
   
1,155
     
1,060
     
916
     
894
     
846
 
Net Interest Income
   
4,043
     
3,767
     
3,756
     
3,540
     
3,420
 
Provision for Loan Loss
   
88
     
252
     
149
     
340
     
64
 
Net Interest Income After Provision
   
3,955
     
3,515
     
3,607
     
3,200
     
3,356
 
Non-interest Income
   
366
     
330
     
301
     
282
     
256
 
Non-interest Expense
   
3,620
     
3,096
     
3,036
     
2,961
     
3,327
 
Income Before Taxes
   
701
     
749
     
872
     
521
     
285
 
Income Tax Expense
   
191
     
168
     
1,226
     
170
     
89
 
Net Income (Loss)
 
$
510
   
$
581
   
$
(354
)
 
$
351
   
$
196
 
                                         
Net Income (Loss) Per Common Share:
                                       
Basic
 
$
0.08
   
$
0.12
   
(0.08
)
 
$
0.08
   
$
0.04
 
Diluted
 
$
0.08
   
$
0.12
   
(0.08
)
 
$
0.07
   
$
0.04
 
Average Common Shares Outstanding:
                                       
Basic
   
6,583,719
     
4,660,325
     
4,654,880
     
4,654,880
     
4,654,386
 
Diluted
   
6,598,542
     
4,764,274
     
4,470,660
     
4,722,607
     
4,734,010
 
Non-GAAP Measure
Adjusted to Exclude Merger Expenses:
                                       
Income Before Taxes
 
$
701
   
$
749
   
$
872
   
$
521
   
$
285
 
Add:  Merger Expenses
   
323
     
-0-
     
-0-
     
-0-
     
-0-
 
Adjusted Income Before Taxes
   
1,024
     
749
     
872
     
521
     
285
 
Income Tax Expense
   
191
     
168
     
1,226
     
170
     
89
 
Less:  Income Tax Benefit from Merger Expenses
   
41
     
-0-
     
-0-
     
-0-
     
-0-
 
Adjusted Net Income (Loss)
 
$
792
   
$
581
   
$
(354
)
 
$
351
   
$
196
 
Net Income (Loss) Per Common Share:
                             
Basic
 
$
0.12
   
$
0.12
   
(0.08
)
 
$
0.08
   
$
0.04
 
Diluted
 
$
0.12
   
$
0.12
   
(0.08
)
 
$
0.07
   
$
0.04
 
Average Common Shares Outstanding:
                                       
Basic
   
6,583,719
     
4,660,325
     
4,654,880
     
4,654,880
     
4,654,386
 
Diluted
   
6,598,542
     
4,764,274
     
4,470,660
     
4,722,607
     
4,734,010
 
 
9 |  P a g e
 

Carolina Trust BancShares, Inc.
Selected Financial Highlights
Dollars in thousands, except share and per share data

   
6/30/18
   
3/31/18
   
12/31/17
   
9/30/17
   
6/30/17
 
Capital Ratios:
                             
Common equity tier 1 capital ratio*
   
12.16
%
   
10.43
%
   
10.10
%
   
10.31
%
   
10.89
%
Tier 1 capital ratio*
   
12.16
%
   
10.43
%
   
10.10
%
   
10.31
%
   
10.89
%
Total capital ratio*
   
13.14
%
   
11.41
%
   
11.08
%
   
11.26
%
   
11.83
%
Tier 1 leverage ratio*
   
10.45
%
   
9.49
%
   
9.22
%
   
9.54
%
   
9.75
%
                                         
Tangible Common Equity (a)
 
$
48,145
   
$
29,315
   
$
29,046
   
$
29,682
   
$
29,479
 
Common Shares Outstanding
   
7,156,987
     
4,660,987
     
4,657,880
     
4,654,880
     
4,654,880
 
Book Value per Common Share
 
$
6.73
   
$
6.30
   
$
6.25
   
$
6.39
   
$
6.35
 
Tangible Book Value per Common Share (a)
 
$
6.73
   
$
6.29
   
$
6.24
   
$
6.38
   
$
6.33
 
Performance Ratios for the 3 Months Ended (annualized):
                                       
Return on Average Assets
   
0.44
%***
   
0.55
%
   
(0.35
%)**
   
0.35
%
   
0.20
%
Return on Average Common Equity
   
4.69
%***
   
8.00
%
   
(4.71
%)**
   
4.67
%
   
2.64
%
Net Interest Margin
   
3.76
%
   
3.79
%
   
3.91
%
   
3.80
%
   
3.80
%
                                         
Asset Quality:
                                       
Delinquent Loans (30-89 days accruing interest)
 
$
957
   
$
430
   
$
649
   
$
2,170
   
$
2,615
 
Delinquent Loans (90 days or more and accruing)
 
$
25
   
$
-0-
   
$
82
   
$
-0-
   
$
181
 
Non-accrual Loans
   
1,080
     
1,125
     
2,664
     
2,142
     
2,715
 
OREO and Repossessed property
   
1,971
     
2,215
     
789
     
467
     
583
 
Total Nonperforming Assets
 
$
3,076
   
$
3,340
   
$
3,453
   
$
2,609
   
$
3,479
 
                                         
Restructured Loans
 
$
4,006
   
$
4,096
   
$
4,163
   
$
4,363
   
$
4,428
 
Nonperforming Assets / Total Assets
   
0.65
%
   
0.75
%
   
0.87
%
   
0.65
%
   
0.89
%
Nonperforming Assets / Equity Capital & ALLL
   
5.91
%
   
10.07
%
   
10.75
%
   
7.86
%
   
10.61
%
Allowance for Loan Losses / Nonperforming Assets
   
124.94
%
   
113.15
%
   
101.80
%
   
131.20
%
   
92.36
%
Allowance for Loan Losses  / Total Loans
   
1.03
%
   
1.03
%
   
1.03
%
   
1.01
%
   
0.99
%
Net Loan Charge-offs (Recoveries)
 
$
24
   
$
71
   
(26
)
 
$
130
   
$
323
 
Net Loan Charge-offs (Recoveries) / Average Loans (%) (annualized)
   
0.03
%
   
0.08
%
   
(0.03
%)
   
0.16
%
   
0.41
 
Note:  Financial information is unaudited.

*Note:  Capital ratios are presented for Carolina Trust Bank which reports these ratios to the Federal Financial Institutions Examination Council on form FFIEC 051.
**Note:  For the three months ended December 31, 2017, excluding the impact of the deferred tax asset revaluation from the Tax Cuts and Jobs Act would result in ROA of 0.57% and an ROE of 7.68%.
***Note:  For the three months ended June 30, 2018, excluding merger expenses, net of tax, would result in an ROA of 0.69% and an ROE of 7.29%.
 
(a) Note
Reconciliation of GAAP to non-GAAP:
 
6/30/18
   
3/31/18
   
12/31/17
   
9/30/17
   
6/30/17
 
Shareholders’ equity (GAAP)
 
$
48,201
   
$
29,379
   
$
29,119
   
$
29,765
   
$
29,573
 
Less:  Core deposit intangible
   
56
     
64
     
73
     
83
     
94
 
Tangible Common Equity (non-GAAP)
   
48,145
     
29,315
     
29,046
     
29,682
     
29,479
 
Common Shares Outstanding
   
7,156,987
     
4,660,987
     
4,657,880
     
4,654,880
     
4,654,880
 
Tangible Book Value per Common Share (non-GAAP)
 
$
6.73
   
$
6.29
   
$
6.24
   
$
6.38
   
$
6.33
 
 
 
10 | P a g e


The following information was filed by Carolina Trust Bancshares, Inc. (CART) on Wednesday, August 1, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Carolina Trust Bancshares, Inc.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2018 10-K Annual Report includes:

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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Condensed Consolidated Balance Sheets (Unaudited)
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical)
Condensed Consolidated Statements Of Cash Flows (Unaudited)
Condensed Consolidated Statements Of Comprehensive Income (Unaudited)
Condensed Consolidated Statements Of Operations (Unaudited)
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited)
Consolidated Statements Of Changes In Stockholders' Equity (Unaudited) (Parenthetical)
Earnings Per Share
Earnings Per Share (Details)
Earnings Per Share (Tables)
Fair Value Measurements
Fair Value Measurements (Tables)
Fair Value Measurements, Assets And Liabilities Recorded At Fair Value On A Recurring Basis (Details)
Fair Value Measurements, Assets Measured At Fair Value On A Nonrecurring Basis (Details)
Fair Value Measurements, Carrying Amounts And Estimated Fair Values Of Financial Instruments (Details)
Fair Value Measurements, Foreclosed Assets (Details)
Fair Value Measurements, Impaired Loans (Details)
Fair Value Measurements, Quantitative Information About Level 3 (Details)
Foreclosed Assets
Foreclosed Assets (Details)
Foreclosed Assets (Tables)
Investment Securities
Investment Securities (Tables)
Investment Securities, Amortized Cost, Fair Values, And Unrealized Gains And Losses Of Securities (Details)
Investment Securities, Contractual Maturity (Details)
Investment Securities, Securities In Continuous Unrealized Loss Position (Details)
Loans
Loans (Tables)
Loans, Allocation Of Allowance For Loan Losses (Details)
Loans, Allowance For Loan Losses (Details)
Loans, Analysis Of Past Due Loans (Details)
Loans, Credit Quality Indicators (Details)
Loans, Impaired Loans (Details)
Loans, Non-Accrual And Past Due Loans (Details)
Loans, Summary Of Loans (Details)
Loans, Troubled Debt Restructurings (Details)
Loans, Types Of Modifications (Details)
Loans, Unused Lines Of Credit And Related Party Loan Activity (Details)
Mergers And Acquisitions
Mergers And Acquisitions (Details)
Off-Balance Sheet Risk And Commitments
Off-Balance Sheet Risk And Commitments (Details)
Off-Balance Sheet Risk And Commitments (Tables)
Preferred Stock
Preferred Stock (Details)
Presentation Of Financial Statements
Presentation Of Financial Statements (Policies)
Recent Accounting Pronouncements
Recent Accounting Pronouncements (Details)
Recent Accounting Pronouncements (Policies)
Stock Option Plans
Stock Option Plans (Details)
Stock Option Plans (Tables)
Stock Option Plans, Restricted Stock Awards (Details)
Stock Option Plans, Stock Option Awards (Details)
Stock Option Plans, Stock-Based Compensation (Details)

Material Contracts, Statements, Certifications & more

Carolina Trust Bancshares, Inc. provided additional information to their SEC Filing as exhibits

Ticker: CART
CIK: 1676667
Form Type: 10-Q Quarterly Report
Accession Number: 0001140361-18-036150
Submitted to the SEC: Fri Aug 10 2018 4:17:15 PM EST
Accepted by the SEC: Fri Aug 10 2018
Period: Saturday, June 30, 2018
Industry: State Commercial Banks

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